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Fewer motorcycles being leased because of Novel Coronavirus

Sok Chan / Khmer Times Share:
(Xinhua/Wu Gang)

The financial leasing sector reported strong growth in 2019, but it has now been affected severely by the outbreak of Coronavirus with some financial leasing service providers suffering up to an 80 percent drop in custom. By the end of 2019, the central bank reported that the total value in the leasing industry was recorded at 1,169 billion riels ($287million), an increase of about 63 percent compared with the year before. The leasing sector has contributed to other significant sectors such as family groups (28.5 percent), services (17.9 percent), transport ( 1 4 . 2 p e r c e n t ) , construction ( 6 .9 percent), agriculture (9.3 percent), commerce (6.1 percent) and others a t 17. 1 per cent. However, since the outbreak of COVID-19, from early this year this sector has been dramat­ically damaged. LOLC Camb o d i a Ch i e f Executive Officer, Sok Voeun, told Khmer Times for the first quarter of 2020, the financial leasing sector in terms of sales and purchases were running normally. He said that from January to March this year, around 1,000 tuktuks had been sold or contracted to customers. Voeun added that starting from April, this sector has been affected severely with sales and purchases. “The main reason is because of the outbreak of COVID-19,” he added. “Business has reduced now, there­fore, we saw the sale and purchase of ancil­lary goods drop too” Voeun.Besides the tuktuk, LOLC Cambodia also conducts financial leasing on other vehicles.

However, these products have not suffered from COVID- 19,” he added.The nature of financial leasing is different from a bank or microfinance institution loan, Chief Retail Business Officer Suon Pisey, of AMK M i c r o f i n a n c e Institutions Plc, he said, adding financial leasing involves customers paying for products such as tuktuks and equipment from leasing companies, microfi­nance institutions (MFIs) or banks. However, if leasing companies or MFIs provide the loan service, they own the product until it is fully paid off, according to the contract conditions. He said that a bank loan refers to the money borrowed from the bank or MFIs and customers use the cash to purchase a car, other motor transportation, elec­tronic devices etc. The Nat ional Bank of Cambodia (NBC) said that for more than a decade the financial leasing sector has been considered as part of the banking system in Cambodia. This sector has expanded opera­tions c o n s t a n t l y through the increase of the living standards of people and trust among the public in the leasing sector, according to the NBC.

“The financial leasing sector has been increasing its opera­tions on assets such as motorbikes, cars, agri­culture equipment, c o n s t r u c t i o n machinery, electronics, home appliances, furni­ture and other moveable assets according to customers’ needs,” said the NBC.

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